U.S. Consumer Prices Climb: What You Need to Know

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The big macro can cause big moves in the market. What does today's headline macro news mean for your portfolio?

What's happening: The U.S. Consumer Price Index rose 0.3% in September, bringing the 12-month change in consumer prices to 3.9%.

In plain English, please: As consumers wrestle with a tough economy and sick job market, the last thing they want to see are rising fast-rising prices. While 3.9% isn't an overly worrisome level, the number has been on a steady rise over the past year.

What's crucial to remember, though, is that the overall price gauge does not mean that prices for everything are rising to a similar extent. Over the past year, food and energy have been huge contributors to the rise, with gasoline prices up 33.3% and grocery prices up 6.3%. Prices in other important categories, such as medical care and housing, have risen less than the headline rate.

Stocks to watch: Higher prices for grocery items reflect some of the efforts by major consumer-goods companies -- such as PepsiCo (NYS: PEP) , Dean Foods (NYS: DF) , and ConAgra (NYS: CAG) -- to raise prices to recoup higher costs that they've been facing. While the higher prices may not be welcome news to consumers, it could be good news for these companies -- providing sales volumes don't drop as a result.

Also of note, the prices for used cars fell 0.6% in September but are still up 5.1% from last year. This could be a positive for companies like CarMax (NYS: KMX) and AutoNation (NYS: AN) .

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At the time this article was published The Motley Fool owns shares of PepsiCo and Dean Foods. Motley Fool newsletter serviceshave recommended buying shares of PepsiCo. Motley Fool newsletter services have recommended creating a diagonal call position in PepsiCo. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributorMatt Koppenhefferhas no financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter,@KoppTheFool, or onFacebook. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.

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